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tv   Bloomberg Markets  Bloomberg  August 20, 2015 11:00am-12:01pm EDT

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and europe and oil prices continue to drop. givingpresident of shell the future of oil prices. matt: dick fuld's estate is on the auction block, set to cellrate record place -- sell for a record price. pimm: could health insurance eventually pay people to kick the habit? insight from an e-cigarette executive. matt: good morning. pimm: we are 90 minutes into the trading day. let's take a look at how stocks are performing at selloff today across the board. s&p 500 down by 1%. .he dow falling 200 points nasdaq declining 1.5%.
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pimm: european markets getting crushed. earlier, below 2%. we are seeing a bit of a recovery off the lows, but still big losses overseas. pimm: big losses tied to what's going on with oil prices and what's going on with the currency markets. matt: a bit of a recovery. pimm: unchanged, but $40 a barrel -- who thought we would be talking about $40 oil? ed morris of citigroup. he said that during the last oil drop. a lot of analysts have predicted we could go to $30. $30 athere could be barrel. matt: let's take a look at the
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top headlines from the bloomberg terminal. jimmy carter says he will hope for the best and except what comes. he held a news conference to discuss the cancer that was discovered during operation. carter: they did an mri and found that there were four types of melanoma on my playing -- four spots of melanoma on my brain. i get my first radiation treatment this afternoon. matt: jimmy carter is 90 years old. he's has he will cut back to her medically on his work for the carter center. a report that greases by minister it will call for snap greece's prime minister will call for snap elections.
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greece just received the first portion of that aid money and made a bit of a payment. lexus of process and support from opposition parties now. has supportipras from opposition parties never to pimm: home sales in july climbed to their highest level since before the recession. rising 2% in july to a seasonally adjusted rate of 5.5 9 million homes. economists estimated sales would fall. last month result is 10% higher than a year earlier. there is competition for general electric for its headquarters. ge may beat with a developer to discuss a space and a third story building in atlanta . the company is also looking at dallas and new york state governor andrew cuomo is pushing ge to move to westchester
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county. maded that tax increases connecticut a tough place for the business to grow. coca-cola going on the offensive about its health and nutritional efforts. the new york times published a story about coke's funding of the global energy balance network, group that promotes data that worry that -- a group that promotes the idea that people worry too much about what they eat and not enough on exercise. those are your top stories at the moment. matt: coming up in the next hour, the owners of the weather channel exploring a possible sale of their digital business. will it break up the business from television? will that work for the potential buyer? two days ago, sprawled pharmaceuticals announced fda approval of its female libido drug.
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dick fuld's sun valley estate was expected to sell for a record $50 million. the auction was suddenly postponed. that story and much more ahead. pimm: let's turn our attention to welker. -- prices falling to $40.81. atnt crude in europe trading $46. how low will oil prices go? the former president of shell oil. he suggested the industry may be suffering from its own success and what comes next is anyone's guess. because itd to tell depends upon what global demand shapes of the be over the coming months. the industry is feeling the experience of its own success. based on forecasts back in the 2010-2011 timeframe, the
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industry invested billions and billions of dollars to meet global demand based upon globalion of growth. the global growth in demand not materialized because economies were not strong enough. in which wetuation are overproducing and no one wants to cut back because they want the cash that comes from the sale of oil to pay their loans or pay shareholders. to decrease production, which is only complicating the problem further. we've seen a minor take up in rig count. it is shocking given what we have seen with pricing. what is compelling the continued drilling the mystically -- domestically? >> companies operate according to a plan. each company has its own plan with respect to how much
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production it wants to make. companies on their own will want to make their production plan because that's how they are measured, that's what they promised shareholders. not really ans anomaly, but companies performing according to a plan. when they do that, they must have the economics all set up to do it. maybe economics just to produce cash because they have loans that have to be covered and they have to have the cash to do it. there are some companies that have achieved amazing activity improvements and they can afford to drill more and sell more because of the productivity improvements which have lowered their costs significantly. pimm: the epa came up with a toposal for new regulations cut emissions by 40%. how much will that hurt the producers? >> for most of the major companies, they been on an effort over the last decade to
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reduce methane emissions unfairly. -- voluntarily. the sustainability issue that it represents, the knowledge that this methane going into the atmosphere cannot be good. let's reduce it for that reason. secondly, why waste the gas? let's capture it and get some value out of it rather than just .urn it off or wasted the whole concept of zero emissions has been in the industry for a long time. in some respects, the industry's leading the way and government is following. there is a strong desire to control the industry. as of the industry does not know what it's doing. for the last seven years, this administration has been determined to tell the industry what it can and cannot do. the industry knows what to do. there may be some aberrant operators out there who are resistant to any regulations
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because they don't like to be regulated. those are the exceptions in this day and age, not the rule. >> talk to us about what you think about what is going on off the coast of alaska. global oil majors are cutting down on and shall is doubling down on the arctic. >> i was there when we made the decision to proceed and got the leases back in 2006. this is a potentially extremely important resource for the 20 30's and 20 40's and beyond. anyone who thinks we don't need oil in the 20 30's, 40's and 50's is naive or simply ignorant of the fact that the world will need oil. shell is a pioneer in this respect. is developing the technology to be successful. it has to succeed based upon what it can afford and the decision to proceed this year is important decision because
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the leases have a timeframe on them and if they do not see material about a potential, they might forgo the extension of the lease. matt: john hofmeister. is goingll ahead, what to happen with the weather channels digital properties? stanley toed morgan explore a possible sale of the business. that is next. ♪
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matt: welcome back to the bloomberg market day. pimm: the weather channel is considering a sale of its best of some of its assets. the owners have hired morgan stanley and pjd partners to
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explore a possible sale of their digital businesses. alex sherman helped break this story and he joins us now. tell us who owns the weather channel. pain and blackstone and nbc -- they bought this a few years ago for $3.5 billion. now, it's no surprise that they are looking to sell. hold onto an asset long enough and find out what the market is. the business has drastically shifted from when they originally bought this. tv, bad, digital, good. the digital assets of whether that should the weather -- the digital assets of the weather, it's used by businesses and consumers. matt: an incredibly popular weather app.
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they have the weather channel as an app. they do the weather for yahoo!. pimm: how much money for these extremely popular things? at least $3 billion for the digital businesses. the tv station is more of a question mark based on the estimates, they made $140 million last year. if you put a seven times multiple on that, the going rate for not top-performing new stations -- uymm: why doesn't nbc b the amount they don't own? the station itself does not do much. the online properties might be because comcast wants to get into more digital programming.
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they just invested in buzz feed and vox but nbc is not interested in buying this. they are looking more toward technology companies. googlees like yahoo! or -- that's who they are pitching it to. neither yahoo! or google is interested in this. no one is particularly interested in this. they were looking at a sale last year, started to interview banks, now they've hired to two banks but there's no indication that a sale is imminent. one might not get done right now. paul tubman used to be a morgan stanley banker, he started his own boutique firm. they are merging with blackstone. they will go publicly this year. -- public late this year. pimm: let's get some breaking
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news, taking a look at what's going on across the world. the snap election in greece has been confirmed. matt: alexis tsipras will call snap elections in greece. we have now confirmed this for september 20. we have called the government and confirmed it ourselves. there will be a snap election in greece for alexis tsipras. he has gained support of the opposition party. he has become a pragmatic prime minister. now, this could ultimately longer-term. longer-term.nto a vault him into a longer-term. pimm: the combination of the package and privatization process puts him in a much better position to at least lead the country if he is able to get the political support that he
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needs outside of his party. an interesting turn around. he was elected in january on total austerity, totally anti-european, anti-eu basis. now, he is the one who has made the deal, the one bringing in the austerity and the one who atyed greece's relationship the end after almost wrecking it. pimm: the concept of brinkmanship is not unknown to mr. sippers -- alexa sippers. -- alexis tsipras. going back to brussels and negotiating with the german finance minister and the eu commissioner and the european central bank and figuring out
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how to get this bill a project group. they were going to announce this because of the repayment that was made to the imf. they got the money, they paid the imf and they will look for somebody -- want toe greeks might keep him around because they will need another bailout eventually. unless they wrangle some debt -- pimm: a three-year deal. ensure thats will his participation will be consistent throughout the process. matt: more top headlines -- more on the greek election coming up in a moment. i want to give you what we are looking at elsewhere today. germany says it cannot cope much longer with the pace of refugee arrivals. germany expects to take an 800,000 refugees this year. one full percent of its population.
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40% of all refugees in the eu. other european countries need to do more to help this that's like if the u.s. decided to take 3 million refugees. sears posted a second quarter profit but there may be less there than meets the eye. sale of storess -- theal estate trust retailer posted a loss of same-store sales, falling for the 21st quarter in a row. oferesting -- a producer hours said do you think this has to do with the auto industry? got more complicated, no one needs to go to sears to buy craftsman. discover card, don't leave home without it.
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discover is higher than american express. amex had been number one since the survey started nine years ago. that is a massive loss for american express. pimm: those are your top stories. let's continue more on greece and the potential for the snap election confirmed as being the 20th of september. caroline has been monitoring the situation. what can you tell us about this? >> already, the markets are reacting. bonds and selling up, the market selling off -- we are seeing the greek tragedy rear its ugly head once again. alexis tsipras calling elections for september 20. no sooner had we had the european commission signed on -- sign off on the eightt, they were able to repaid the ecb -- able to repay
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the ecb today. they are able to give some money back to their creditors. he wants to tackle politics at home now. alexis tsipras has lost faith with his own party. her billion comparable happened when he was trying to get through the vote on the bailout deal. one third of his own party was revolting against him. a stand by take calling visa snap elections come hoping to rebuild strength to build aown party stronger coalition and start to get these very tough reforms through and placate and build the trust the creditors once again. pimm: i wonder if you could describe, who is in competition with alexis of risk -- alexis tsipras? is there any party leader that has been put forth as an alternative? syriza is a coalition of the
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left but it had this radical against itpushing vehemently pushing against what alexis tsipras was tried to do. they were the anti-austerity card, but now they are happy to accept austerity. this is what this particular part is trying to rile against. he was the previous energy minister hedging up the left platform. there's been talk that he could set up his own splinter party and that is what currently alexis tsipras is trying to batten down and make sure does not occur. he needs a strength to push through these tough reforms in greece. matt: we are expecting to hear from alexis tsipras in a heevision address in which tenders the resignation of
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syriza. will he then run again as a syriza party member or with the opposition party? >> so many questions. it's part of the formula, he has to tend his resignation today to call the snap elections come september. then, he will run to remain head of his party. he will continue to be the leader of the party. he is trying to weed out some of those who have revolted against him within his coalition. ,he left platform in particular trying to weed out those individuals and come to the help. he's the most popular individual in politics in greece. he has a love backing as an individual. that's a lot of backing as an individual.
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you might have to build a coalition. thank you very much for that. she will stay on top of the situation. pimm: let's go straight to julie hyman with a look at what is happening in the markets right now. julie: in the u.s. markets. we do have a little bit of a bounce off the lows. the dow was down as much as 247, now down about 217. still pretty steep declines across the board for the major averages. the greek news not moving the needle that much. we went again towards the lows of the sessions. two groups contributing to the declines, technology and media. we had some downgrades for semiconductor stocks. micron technology downgraded. we could see another 20% decline between now and early next year.
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having a good run following its earnings, it is down after being cut to reduce from neutral. imagine media stocks. cut overd time warner at bernstein. analysts saying tvs entering a structural design decline. whether the tv operations will be able to be offloaded. pimm: julie hyman taking a look at the markets today. two days ago, sprout pharmaceuticals announced fda approval of its female libido drug. this morning, it became the latest takeover target of valiant pharmaceuticals. matt: if this deal will indeed happen -- >> that did not take long. they've been talking for several weeks. what we have heard just this wentng is that sprout
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before this fda panel of experts six weeks ago. they got a positive recommendation. that expert panel tells the fda this is what we think should happen. they started getting some interest from buyers, valean t came along thing they will pay $1 billion. they've been pretty good about executing these things when they do have a friend the agreement. i'm guessing this will be a done deal at this point. people are wondering about the price, what that means is -- pimm: thank you very much. , talking about dick fuld selling his vacation home. ♪
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pimm: welcome back to the bloomberg market day. that is a live shot from the camera on the roof of our bloomberg world headquarters in new york.
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looking south to the empire state building, the freedom tower and the bank of america building. in the distance, the statue of liberty. let's look at the top stories crossing bloomberg at this moment. greece's prime ministers calling for elections in september. on vote will be held september 20 and prime minister alexis tsipras has lost the support of his own party after agreeing to austerity measures in exchange for another bailout package. greece just received the first portion of that aid money. a former president, jimmy carter will undergo radiation for brain cancer. hemer president carter said will begin treatment this afternoon. duringcer was discovered surgery for liver problems. the former president is 90 years old and technologies it is time to slow down. this acknowledges it is time to slow down. >> i planned on reducing my work
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at the center. we thought about this when i was 80 years old come again when i was 85 and again when i was 90. out is time for us to carry our plans. president father, brother and two sisters all died of pancreatic cancer. his mother also had the disease. unexpected drop in the index of leading economic indicators last month. the decrease was narrowly based this is london building permits because of proposed change in the new york tax credit. the index plus other components rose. prosecutors in california have stepped up their battle this the lawsuit claims uber's screenings failed to prevent them from
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hiring a murderer and sex offender -- when glenn corwin public in 2011, six executives became billionaires. now, only three still have that status. may not be wa billionaires much longer. it down 70% since its ipo. at the moment, markets are closing in europe. let's go to caroline in london. caroline: the perfect storm is brewing in europe. you are seeing the effects on morning of what's been happening in asia, concerns of the slowdown in china, the emerging market selloff, commodities selloff. all of this fueling the selloff in europe. not one single climber in the german stock index.
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everything in the red. the banks and insurers leading the faults of the moment. yet another storm cloud coming over, one made by europe itself, it is greece. alexis tsipras will be calling for snap elections come september. inhave seen a selloff athens, down by 3.5%. this adding to the concerns of political stability in greece -- he wants to regain some of his strength after forcing through the bailout. he has to depend upon his opposition. he saw mutiny within his own party. he therefore wants to reclaim that and go back to the polls. it is having its damaging effect -- every industry group falling. the united kingdom very close to
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a correction territory of 10% from its high earlier this year. money going out of greece. see him much this up 1.3%. today, that greek tragedy really gets ugly head. head.ring its ugly , new studiesup show that smoking electronic cigarettes is 95% safer than smoking tobacco cigarettes. britain's national health service has to consider prescribing e-cigarettes to help smokers quit. that would cost them nothing. valuation puts on my student loan companies so high in the top 30 u.s. banks by
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market capitalization. dick fuld's sun valley compound was expected to fetch a record $50 million. the auction will suddenly postponed. the new date is september 17. they put the property on the that shed 59 million listed with concierge toxins -- he listed it with concierge toxi auctions. let's understand more about the option. why was it postponed? >> we reschedule the auction for a few reasons. we had a lot of last-minute interest. a number of people stepped forward in the past few days. benefit of our client, we decided to ship the date to allow them to participate.
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and anyone else who would like to become involved. pimm: is there a specific floor, is there a reserve price? >> this property has no reserve. it is selling to the highest bidder. that was the case since the beginning. you mentioned the price of $59.5 million. that price was set as a proposed listing value. it was never actively on the market before we started marketing at. i am able to disclose that we have an opening bid at $20 million. it is going to sell to the highest bidder at or above that figure. pimm: i wonder if you could describe come a what does this tell us about the market for these high end second homes? >> in general, second-home purchases have been going up. they are two years behind the regular market, vacation homes.
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just this morning, the national association of realtors said sales of homes in the west are up 21%. there is a lot of demand for high-end expensive homes and second homes where the tech economy has grown stronger. what about a property such as the one dick fuld is try to sell that has a variety of buildings, a lot of land? this is not a typical vacation home. it limits a lot who the market is. a narrow, but it only takes one buyer. there could be different ways to use this property. you could have it for your big retreat. allen and company has this big tech conclave for people like mark zuckerberg and warren buffett. to go out there and do deals. this would be a good place to post parties for that.
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it has nine lots, and could be developable. if there are any restrictions on the property -- >> john is correct. the property has nine lots. three that are currently built on. there is potential to construct more homes or more structures for use. most likely come of the property will be maintained in its entirety. is so unique to have 71 acres so close to downtown sun valley. to keep it in its entirety will maintain the highest value. clients we have that have expressed most interest in the property are end-users. can you describe the efforts that you've taken to market the property? how do you market something that is $50 million?
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that certainly is something that our company is very focused on. we sell properties in the very high end luxury market. we market than through traditional means, advertising and public relations. a lot of personalized outreach -- we've built a great database. we also work with a number of relationships that help us to pinpoint potential buyers that we reach out specifically towards. pimm: how do you make a property valuation of a property such as this? >> that is the benefit of utilizing an option platform -- option platform. platform. we do not know what the value of the property is. it is worth what someone is willing to pay for it at a given time. these are properties you cannot
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just value based on price per square foot. they are not worth what the house next door is worth. pimm: is it considered more valuable because it was once owned by dick fuld? >> certainly the interest level, people coming forward is higher. we've sold properties for well-known individuals. by the time you really get down to the -- >> what is the most expensive property you've ever sold? canhe highest price i $92.5 million. , the demandahead for e-cigarettes could decrease -- increase. they could be described that's
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prescribed for smokers to quit smoking traditional cigarettes. ♪
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pimm: lesbian with a look at the top stories crossing the bloomberg at this moment. this sounds like something from hollywood, but it's not. two men in poland and say they discovered a not see era -- not azi era train filled with gold. the two men say they want 10% of the treasures value if they reveal the train's location. it looks as if you missed your chance to buy a tabloid newspaper.
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the new york daily news is now off the market. the owner met with several interested parties but he has decided not to sell the newspaper. for years, the daily news has been losing readers and add dollars to digital websites. lebron james is hoping his story can inspire young filipinos to rise from adversity. he is in manila to mentor finalists of a nikes sponsored reality television program. this is his second visit to basketball crazy philippines where every village has a basketball court. those are your top stories at the moment. a question for health insurers, will they eventually pay for electronic cigarettes? wednesdayblished backed the use of electronic cigarettes as an alternative to smoking tobacco cigarettes saying they are 95% safer. inlip morris international
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japan tobacco have all invested in e-cigarettes worth $10 billion by 2017. with insight on the business, we have jeff holtman, the chief executive of april corporation. -- vapor corporation. i wonder if you could tell us your reaction to this study. there are a lot of competing studies. >> thank you for having me back. wonderful to be with you again. let's look at the study for a second and what necessitated the study. it's wonderful news for the public and the industry. if you look at the public health study, the reason for it is there has been so much controversy in the industry and information that has been disseminated regarding studies that have been misinterpreted. what i really feel is that there has been a lot of propaganda
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which has led the public to that in fact cigarettes and e-cigarettes are equally harmful. pag decides to go and bring what they call the truth to the public because they believe people are not switching over to e-cigarettes because of the fear from this propaganda. they come out with this study and the indicated that in their report, e-cigarettes are 95% safer than regular combustible cigarettes. the effect will be wonderful for the industry and the public at large. i read this recently and i agree wholeheartedly -- every time some of the takes a puff from , theyrette or vaporizer are not taking up up under regular cigarette and that is a victory. kingdom,the united doctors cannot prescribe electronic cigarettes for
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medicinal use. would you be in favor of having these products classified as medicinal and only available by prescription? >> it is a double-edged sword. they also indicate it appears it is too onerous right now in terms of the cost and the paperwork involved in getting these products approved. they feel it would give big tobacco and unfair advantage. , if these pundits are regulated as are regulated and prescribed, there will be more control over the quality of the products. that would be the good side of it. i would be in favor of it so long as the process to get products approved is tempered so are one midsize players equal grounds with the larger players like big tobacco. tell me from a business
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perspective, you think insurance companies will eventually reimburse or offer low-cost electronic cigarettes to people currently smoking tobacco cigarettes? >> >> this is a very long-term view. of england has stated that they believe the cost of giving this stuff away for free will impact society less over the long-term because they will more than recoup the cost of giving the product through insurance or for free in this medical costs down the road. over 100,000 people a fromwho died smoking-related illness. these are long and painful and expensive debts. if a long-term view is embraced, you could see that as a prescription item.
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still ahead, the student loan market. students have debt of over 1.3 chilean dollars. debt of over $1.3 trillion? ♪
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pimm: there is a new way to refinance student that, paying -- doublinginance its value, making roughly $4 billion. here to discuss how it's becoming one of the most yaluable financial technolog startups, we turn to betty liu. betty: it's very popular. financial technology companies disrupting the entire financial space. it's a company doing just that.
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it has been around for several years. what is new about this is that it just raised $1 million on a $4 billion valuation -- $1 billion. basically, it shows you that there is that investors feel there is this huge need to refinance loans. that has been a continuing problem in the united states. all those campaign proposals to figure out how to make education more affordable. betty: they refinance not based on the students credit rating but more on where they graduated from. but say they graduated from ivy league like harvard or yale, they would be able to refinance at a lower rate.
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they are more likely to pay that loan back. on a related note because there's so much controversy around student loan debt, malcolm gladwell taking to twitter, ripping apart yale and their endowment. they pay hedge fund managers to manage the endowment. $170 million to students on scholarships and benefits. the hedge fund guy gets millions back for managing the same endowment. what is that called? pimm: i thought it is called a job. when you get a smart person who has the interest of the university at heart? endowment beatll endowment betty: yale beat the s&p.
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pimm: we will find out. it's time for today's options insight. julie: i want to start with a look at the markets because we are seeing this selloff, a pretty sharp when going on in the major averages today. it spreads to the u.s., concerns about global growth went on the major averages -- weighing on the major averages. joining me for today's options insight is the president of market i wanted to start with the idea that we are seeing options traders get a lot more bearish on the major averages as measured by the put call ratio py and s&p. >> there's a number of factors
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at play. all have been in the news. week.inese yuan last a big thing is the possibility of the fed raising interest rates next month. julie: are you buying into all of this sentiment? dan: no, not really. the market was over 2% the last couple of days. that is because the chinese market, the shanghai stock exchange etf is down 10% over the last couple days. it is a knee-jerk reaction. if you remember it's a wonderful life, there's a scene where the character is talking to his shareholders and he says he is buying. this is the opposite. everyone is clamoring for these puts, driving up the price. it's a good opportunity to sell
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puts to the panicked buying. julie: how would you be doing that? investor -- i have an alternate trade idea if you are a traitor. -- trader. puts ining cash secured the spy. 203 --the cash secured julie: we have to leave it here. thank you so much. ♪
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pimm: good day. it is 9:00 a.m. in sanford, noon -- 9:00 a.m. in san francisco, noon in new york. stocks plunging around the
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world. the s&p erasing its gains for the year. pimm: alexis tsipras set to call for snap elections next month. he is trying to cement his authority after a party mutiny. betty: donald trump takes on jeb bush. halls in newtown hampshire. pimm: good afternoon, i am pimm fox. betty: i'm betty liu. let's begin with a look at the markets right now. s&p is down right now by about 1%, raising its gains for the year. sc erasing its gains for the year.


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